Pakistan seeks update from its envoy in China over USD 21 billion support request

Pakistan's finance ministry has sought an update from its ambassador to China, Moin ul Haq, on Islamabad's request for USD 21 billion financial packages amid the country's deteriorating economic conditions, media reported citing reliable sources.

According to Business Recorder, Pakistan requested China for financial support of about USD 21 billion through rollover of existing loans of USD 10.735 billion and USD 10 billion as deposit fund, to meet future financial needs and deal with financial challenges.

On February 18, this year, the Pakistan Finance Ministry in a letter to its envoy said that several agenda items came under discussion during Prime Minister Imran Khan's visit to China on February 3-6.

This includes those submitted by the Ministry of Finance that included rollover of all financing facilities (SAFE deposits of USD 4.0 billion and commercial loans of USD 6.735 billion) upon maturity - one SAFE deposit of USD 2.0 billion maturing on March 23, 2022.

Pakistan has also requested for provision of a deposit fund of USD 10 billion. In addition, State Bank of Pakistan has proposed enhancement of currency swap arrangement to USD 15 billion.

Islamabad's financial condition is in a precarious situation under the inefficient leadership of its Prime Minister Imran Khan.

International Monetary Fund (IMF) had allocated additional Special Drawing Rights (SDRs) to its member countries in August 2021 with the aim of assisting them to fight the COVID-29 pandemic.

Business Recorder said that China's share in the allocation came to SDR 29.22 billion. Pakistan's Ministry of Finance has requested Chinese concurrence for the use of a portion of its share either bilaterally or through a mechanism put in place by the IMF.

"Pakistan's proposals submitted to the Chinese leadership may be followed with the relevant Chinese authorities. Any initial response on the proposals may also be shared with the Finance Division," Business Recorder sources quoted Finance Ministry as saying in its new communication of March 15, 2022 with Pakistan's envoy to China.

( With inputs from ANI )

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